Monday, October 13, 2008

Iraq's Oily "Crown Jewels" to be Developed by West

Two of the big oilfields involved in the latest process have been described by oil experts as Iraq's Crown Jewels.

BBC correspondent Jim Muir said it was a "pretty big deal" worth "several billion pounds", adding that the move was a sign of "normalising times" in Iraq.

However, the bidding process has reignited arguments over whether the American-led invasion, in which Saddam Hussein was toppled in 2003, was in fact aimed at gaining greater access to Iraq's oil wealth.

Iraq's oil minister is holding UK talks to negotiate contracts with international companies aimed at boosting the country's oil output.

Some 41 companies have qualified to bid to develop eight oilfields, which hold about 40% of Iraq's oil reserves.

Hussein al-Shahristani is meeting world oil executives in London as part of plans to raise output from 2.5m barrels a day to 4.5m within five years.

Iraq has an estimated 100bn barrels of reserves - some of the world's largest.

Years of war and international sanctions left the country's oil industry battered, but the reduction in violence in much of the country over the past year has helped the sector achieve greater stability.

Oil production is currently at its highest since the 2003 invasion.

'Crown Jewels'

Iraq first revealed in June it was seeking foreign investment to develop six of its most important oil fields - Rumaila, Kirkuk, Zubair, West Qurna, Bai Hassan and Maysan.

The delegation in London is now presenting companies, including giants BP, Shell and Exon, with geological data and details of the financial terms of contracts in an effort to get deals signed by the middle of next year.

If successful, it will be the first time foreign companies have been able to exploit oil fields in Iraq for 30 years.

Two of the big oilfields involved in the latest process have been described by oil experts as Iraq's Crown Jewels.

BBC correspondent Jim Muir said it was a "pretty big deal" worth "several billion pounds", adding that the move was a sign of "normalising times" in Iraq.

However, the bidding process has reignited arguments over whether the American-led invasion, in which Saddam Hussein was toppled in 2003, was in fact aimed at gaining greater access to Iraq's oil wealth.

Mr al-Shahristani, a Shia nuclear scientist, was once director of research at the Iraqi Atomic Energy Commission.